Kenneth Harney: Fannie, Freddie offer summer clearance

Sunday

Jun 26, 2011 at 12:01 AMJun 26, 2011 at 1:47 PM

Looking for a deal in which the home seller pledges to contribute potentially thousands of dollars toward your closing costs? If so, check out the summer sale terms available from two of the largest and most motivated sellers of foreclosed homes in the country: Fannie Mae and Freddie Mac.

Looking for a deal in which the home seller pledges to contribute potentially thousands of dollars toward your closing costs? If so, check out the summer sale terms available from two of the largest and most motivated sellers of foreclosed homes in the country: Fannie Mae and Freddie Mac.

You might know the companies for their troubled mortgage businesses or the financial foibles that crashed them into the control of federal conservators in 2008. But the flip side of those problems is that they now have massive numbers of properties taken back through foreclosures.

Fannie Mae owned 153,549 of them at the end of the first quarter. Freddie Mac owned 65,174. That's almost 220,000 houses for which they need to find new owners - quickly - or they'll rack up even bigger losses for taxpayers.

To move that bulging inventory, both companies have begun time-limited sales campaigns with significant incentives for new owner-occupant purchasers - no investors allowed - and extra cash for the real-estate agents who bring buyers to the table.

Fannie and Freddie both are offering to pay up to 3.5 percent of the price of the house toward buyers' closing costs, plus they'll hand over a bonus of $1,200 to participating real-estate agents. Fannie's program covers properties on which contracts are accepted and close no later than Oct. 31. Freddie's sale requires contracts no later than July 31 and closings by Sept. 30.

Fannie's program even offers mortgage money to help finance these purchases, sometimes with as little as a 3 percent down payment. The company also has what it calls a "renovation mortgage" option that provides additional mortgage amounts to cover fix-ups.

Freddie does not offer special mortgage financing for buyers during the sale period but has other inducements, including two-year home warranties and 30 percent discounts on appliances.

All the foreclosed properties are listed with photos and descriptions at either www.HomePath.com (Fannie) or www.HomeSteps.

com (Freddie), where you can search by price, local markets, ZIP codes and entire states. They run the spectrum from expensive detached homes, low-budget urban condos and suburban tract town houses nationwide. Featured offerings on HomePath recently included:

• A two-bedroom condo with 1,164 square feet in Las Vegas for $43,999.

• A four-bedroom, two-bath house in Brentwood, Md., for $65,000.

The summer clearance sales are part of rapidly accelerating efforts by both companies to get ahead of the tidal waves of foreclosures flowing into their portfolios in recent months. During the first quarter of this year, Fannie Mae acquired 53,549 properties. During the same period, however, it managed to sell off 62,814 houses.

Freddie Mac also sold more foreclosed homes than it took in during the first quarter, acquiring 24,709 houses while selling 31,628. In some parts of the country, Freddie's offerings are stimulating multiple bids on houses, spokesman Brad German said.

Both companies are targeting only buyers who plan to live in the homes - rather than non-occupant investors who want to flip them or rent them out.